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On November 14, the European Banking Authority (EBA) released comprehensive guidelines for Payment Service Providers (PSPs) and Crypto-Asset Service Providers (CASPs) to ensure alignment with European Union (EU) and national restrictive measures. These guidelines aim to reduce risks and strengthen compliance when transferring funds or crypto assets.
“These Guidelines clarify how restrictive measures policies and procedures interact with financial institutions’ wider governance and risk management frameworks, to avoid operational and legal risks for financial institutions and ensure an effective implementation of restrictive measures,” stated the EBA.
As regulatory scrutiny intensifies for the decentralized finance (DeFi) sector, recent incidents in traditional finance reveal ongoing vulnerabilities. On November 13, Metro Bank was fined £16.7 million by the Financial Conduct Authority (FCA) due to major deficiencies in its financial crime prevention systems. A flaw in the bank's automated monitoring system, introduced in June 2016, left over 60.5 million transactions totaling more than £51 billion unmonitored until December 2020.
